Dan Frishberg – the money man – and the IRS? It is that time of year…

Two things…related to Dan Frishberg and the now defunct BizRadio:

One – tomorrow is April 1st – April fools day – so here’s a question: who is attending Dan’s special “sold out” seminar to be held tomorrow?  If you attend, will you please provide some input into attendance and benefit from the seminar.  You can do that through your comments on this blog or privately share your thoughts by contacting me at chuck @ chuckgallagher.com.

I hope this isn’t an April fools joke – surely there is a seminar tomorrow night?

Item #2 – most everyone knows it’s tax season and if you haven’t filed you’ve got two weeks.  I say most everyone knows…  seems that Wesley Snipes forgot about that for several years and he got sentenced to three years in prison (he’s out on appeal thus far).  But I have some questions that would apply for the 2010 filing season in 2011.  So here goes…

• Salem Communications is taking 1110 am back and BizRadio is effectively no more…
• They are giving Dan Frishberg $800,000 for his interest.  QUESTION: Is Dan getting the $800,000 or is that doing to the entity that was BizRadio?  And does that income represent a loss or gain on the asset?
• More importantly, Salem agrees (according to published reports) to give Dan Frishberg $1,600,000 of “free time” on their radio stations around the US to do his radio program.  QUESTION: He’s getting “free” time…  Isn’t that income?  Remember: income from all sources is taxable unless specifically excluded from the statutes.  Bartered income – free time for services – would clearly appear to be a taxable transaction.
• Wait a second – hold it a minute – are they giving the time to BizRadio or to Dan Frishberg?
• Isn’t Rehan Siddiqi going to be standing at the front of the line asking for some of that $800,000?
• Aren’t there several groups of people standing in line wanting a piece of the $800,000 pie including the SEC receiver?
• THE BROADER QUESTION:  If you were given $1.6 million in air time – what is that worth today if it were sold?  Is it worth today half that – three quarters of that – what is the present value of $1.6 million of Salem Communication air time?  Isn’t that, since it doesn’t seem to be related to taking back the station, a taxable transaction?
• Dan is broadcasting his show on 1110 am now – so is he paying for that time or is that time accruing against the $1.6 million air time commitment?  Unless Dan is paying for it, it would appear that there is a tax implication at the least.
• The other major question is – how is Dan monetizing his show today for the benefit of the apparent defrauded investors?  Is he using the show to produce a profit so that unsuspecting investors have an opportunity to get a return on their investment, or is Dan using the show to personally benefit Dan and his RIA (now transferred to another firm)?  I admit it is confusing…so comments that clarify are welcome.

Let me be clear…in no way am I inferring that Dan Frishberg has violated in any way the tax law.  Rather, I am pointing out that the BizRadio sale and “free time” agreement (at least what is public) would likely create a tax implication in the future.

Where is all this going…I don’t know.  What I do know is – there are many victims and a deafening silence from Dan “the money man” Frishberg.  As an ethics speaker and author, I would feel much better if Dan would step up and clear any misunderstandings that might be out there and share with investor “victims” his plan to create wealth for them.

YOUR COMMENTS ARE WELCOME!

Gordon Grigg – How a massive Ponzi scheme fraud was exposed – Part Two

Having been there, I completely understand the impact that choices have – not only on the individual that makes them – but also on the lives of others who are connected.  Whether a spouse, a child, a mother or father – whether a brother or sister – or whether a defrauded investor – everyone connected with the individual who perpetrated the fraud is a victim and, for most, the pain can run deep.

I was told that my earlier blog about Gordon Grigg was filled with lies…that it was slanderous and/or libelous.  I take those claims seriously.  To be clear, my objective is to open a dialogue regarding how a Ponzi scheme is perpetrated and how victims are lured in.  But for a moment let’s look at the allegation of slander and/or libel.

According to Wikipedia – slander refers to a malicious, false and defamatory spoken statement or report, while libel refers to any other form of communication such as written words or images. Most jurisdictions allow legal actions, civil and/or criminal, to deter various kinds of defamation and retaliate against groundless criticism. Related to defamation is public disclosure of private facts, which arises where one person reveals information that is not of public concern, and the release of which would offend a reasonable person.

Hum…well my words are written and the facts that I reveal are provided either from the public domain or are provided by people who have been directly affected by the crime committed by Gordon Grigg.  Further, as best I can tell, none of the comments made or disclosed are private facts that are not of public concern or should offend a reasonable person.  Rather, it would seem that what is disclosed has great public benefit.  If facts related to the commission of a crime can, upon public exposure, potentially protect otherwise unsuspecting individuals from being victimized – then their disclosure is for the public good.

Does it mean that victim perceptions and comments made at trial are not painful when retold.  NO!  No doubt they are to anyone affected.  And while it is not my intent to cause pain, I also know that complete transparency is one of the only ways that true healing can take place.  To say that Gordon Grigg has received his punishment and now the discussion should cease is more an attempt to quietly sweep under the rug the crime he committed rather than expose the true nature of the actions he took and seek to understand them for what they are.

AUGUST 6, 2009 – SENTENCING

According to the FBI the following took place at sentencing:

United States Attorney Edward M. Yarbrough announced that Gordon B. Grigg (“Grigg”), Franklin, Tennessee financial advisor and owner of ProTrust Management, Inc. (“ProTrust”), was sentenced today in federal court to ten (10) years in prison for perpetrating a Ponzi scheme that resulted in a loss of more than $6 million to more than sixty (60) investor – victims.

United States District Court Judge Aleta Trauger, in sentencing Grigg, stated “This case has a more vicious twist than the Madoff case.” Judge Trauger described Grigg’s crimes as “ . . . preying on vulnerable victims in crisis,” noting that Grigg’s scheme “ . . . destroyed families, relationships, marriages, and wreaked incredible havoc.” Prior to imposing sentence, Judge Trauger heard from seven (7) victims who testified as to the devastation Grigg’s fraud had caused to their lives and the lives of their families.

Notes taken at the sentencing hearing reflected the following:

The judge started by saying there were several factors she took into consideration when sentencing Grigg. They were the nature of the crime and the circumstances. This was not a violent crime, but violence was done in many ways. It was similar to the Madoff case but with a vicious twist. It was done in an aggravating way. Two factors keep arising in the pattern that Mr. Grigg worked. The first was that he preyed on vulnerable people and the second was the way he brought religion into the scheme.

People who commit a fraud (most of you who read my blog regularily know I committed a fraud back in the mid ’80′s – not proud of that fact, but it is a fact), typically have a pattern of behavior – a mode of operation if you will – that becomes successful and natural as they seek out victims and attempt to sell them on their scam.  More than one victim has said that Gordon Grigg used his faith as an effective lure.  Clearly stated, I wasn’t there, but it seems to be born out in testimony at sentencing that this is true.

The FBI new brief goes further to say:

Grigg pleaded guilty on April 29, 2009, to mail fraud and wire fraud. Grigg admitted during the plea hearing that, between 1996 and 2009, he operated an elaborate Ponzi Scheme designed to defraud investors who deposited more than $11,000,000 in funds with his company, ProTrust Management. Grigg promised clients that he would invest their money in pooled-client purchases of fixed-term certificates of deposit, private placements, corporate notes and debentures, with the accounts being titled collectively in the Protrust company name. Grigg further promised to personally manage client funds, and promised investors that he would generate and sustain high rates of annualized returns on investment. However, Grigg admitted that it was never his intention to invest the client funds he solicited. Instead, Grigg stated that he used the money placed with ProTrust for his personal benefit and expenses, to operate ProTrust, and to maintain the Ponzi scheme by disbursing “fictitious” earnings and return of deposits to clients who cashed out or closed their ProTrust investment accounts.

The pattern is so common!  NOTE: If an investment adviser promises sustained high rates of returns (something special that you can’t get anywhere else) – RUN!  There is a better chance than not that a fraud is somehow – somewhere – in the works.  And, more times than not, the illusion created is so great that people close to the fraudster have no clue.  Spouses, children and relatives often experience some of the most severe pain when the find that their trust has been broken – no shattered.

Notes from the trial showed the following:

Investors not only lost money themselves, but they got their friends, families and bosses to also invest with Grigg. He caused financial ruin to these investors. They lost college funds for their children and grandchildren, retirement funds were lost or diminished. He destroyed families and marriages. He wreaked havoc with investors. The investors are not only sad, angry and guilt ridden, but are probably in need of counseling. They have suffered great mental anguish because of the nature of this crime and the circumstances.

From a personal perspective I know I will receive criticism for what I am about to say, but Gordon did not destroy families and marriages.  Rather, the choice to blindly invest money with Gordon and the repercussions that followed from his fraud had that effect.  I have a problem with being a “victim”.  Although I use that term (it’s one that people can understand and connect with) – the reality is – EVERY CHOICE HAS A CONSEQUENCE.  Gordon made choices that had direct and far reaching consequences.  Investors also made choices that had a consequence.  In my earlier article Steve Wieland stated that he did not do his due diligence.  That failure had a consequence.  Every choice does have a consequence!

To conceal and sustain the Ponzi scheme, Grigg admitted that he fabricated documents, including invoices, forged correspondence, and fraudulent account statements purporting to reflect client ownership of non-existent securities. To deceive investors into believing that their investments were safe, Grigg admitted that he falsely claimed to have negotiated partnerships and special business relationships with several of the nation’s most successful investment firms, including Berkshire Hathaway, Inc., Goldman, Sachs & Co., Morgan Stanley & Co., Incorporated, and Kohlberg Kravis Roberts & Co. However, as Grigg admitted to the Court, no such business relationships ever existed, and Grigg used counterfeit corporate letterhead and the forged signatures of national investment firm executives to create fictitious documents and correspondence that appeared to confirm unique pooled investment opportunities between ProTrust and national investment firms.

Grigg further admitted that, between November 4, 2008 and January 28, 2009, he repeatedly solicited funds from investors by falsely representing that he had access to “government-guaranteed commercial paper and bank debt” available as part of the newly-created Troubled Assets Relief Program (“TARP”). Grigg told investors that he had committed more than $5,000,000 in ProTrust pooled client funds towards purchase of TARP guaranteed debt as part of a private placement partnership between ProTrust and the investment firms Berkshire Hathaway, Inc. and Kohlberg Kravis Roberts & Co. However, no such private placement partnership had ever existed between ProTrust, Berkshire Hathaway, Inc., and Kohlberg Kravis Roberts & Co., and no such TARP-guaranteed investment opportunity had ever been offered or made available to individual investors or national investment firms.

The finding of fact reflected in the FBI’s news release is quite interesting.  FOR THE RECORD, rarely does the Federal Government (or an Agency thereof) catch a criminal.  The crime is typically exposed by either an unsuspecting investor or a dramatic change of circumstance that forces what is done in the dark to be brought to the light.

Almost as this was happening (or at least soon thereafter) I received a call from Steve Wieland who shared with me a profound revelation that he uncovered related to his investment with Gordon and the investment of friends he recommended.  His comments follow:

I had advised a third friend, another medically retired airline pilot, of what a good job Gordon had done for us. He was selling his house, moving from Pennsylvania and had some extra money. This was the end of 2008.

The end of 2008 was the beginning of the massive financial meltdown.  I have been asked over and over why the proliferation of Ponzi schemes.  My response was – there are no more than usual.  The Ponzi schemer (and I speak from personal experience) is a bit like a bottom feeder fish.  You can’t see them till there is a major drought.  When the water is low the bottom feeder seems to come to the surface.  So as Steve said -  it was the end of 2008…that makes perfect sense…especially since it takes new money to prop up a Ponzi scheme.

Looking back now I can see how it all fell apart for Grigg. Money was so tight he was scrambling to get new Ponzi victims to placate the ones he already had. He became pushy. My friend in Pennsylvania called me very upset because Gordon wanted the money immediately.  My friend was uncomfortable. That night, December 16, 2008, I called Grigg and ask him to kindly verify my investments with him.  I asked him to provide the phone number for the investments or anything that would make my Pennsylvania friend want to invest with him. I knew that would not be a problem, until Grigg questioned as to why I would want that information. The discussion then started heating up to the point where I knew down in my stomach something was very wrong.

Only a few days before, the California friend and myself had received notice that Grigg could place us in an investment with the company by the name of KK and R. This investment would yield 12.5% guaranteed by the national T. A. R. P. Guaranteed by the federal government paying 12.5% interest. The only catch was that we had to roll over our existing investments for yet another three years. He sent us documents to this effect.

That’s another tell tail sign…if asked to extend your investments you might begin to question – why.  In order to a Ponzi scheme not to collapse you either need new funds or at a minimum keep existing funds longer so as not the erode the ability to maintain the illusion.

The following day I called my friend in California to tell him of my concerns. Like most victims of Ponzi schemes, they don’t want to believe it. So I set about doing the work myself. I contacted KK and R. They had never heard of Grigg or Pro-Trust management. However if I would kindly fax a statement showing that I had previous investments with them, as well as the new potential federally backed investment they would be sure to investigate and get back to me right away. I then contacted Goldman Sachs and told them of the potential investment with KK and R.  Goldman Sachs was supposed to be the administrator of this investment. The gentleman at Goldman Sachs immediately told me it was bogus and to contact an attorney.

It only takes one slip – one request – one inquiry – to cause the house of cards to collapse.  Most of the time the fraudster is the one who slips up stating something or producing something to maintain the illusion – only to find that he/she (in this case “he”) is not the smartest man in the room.  Once the card is pulled – the house of cards is destined to collapse because the foundation of illusion is pierced.

“Mr. Grigg’s crimes were not merely irresponsible manipulations of the financial system without consequences, they were acts of extraordinary destruction to his victims,” United States Attorney Edward M. Yarbrough said. “Grigg defrauded investors by repeatedly and falsely promising them ‘safe’ growth based on ‘unique’ pooled-investment opportunities, including promises of access to TARP guaranteed funds. Instead, the investors lost their ‘nest eggs’ and retirement savings as part of an elaborate Ponzi scheme. The effect of Mr. Grigg’s crimes was devastating to his victims. The United States Attorney’s Office will continue to diligently and aggressively prosecute the perpetrators of such schemes.”

Steve Wieland continued…”Two days later, the federal S.E.C. contacted me about the information I had sent regarding K. K. and R. They wanted to talk to me. I hired an attorney, who told me this was an outright Ponzi scheme. She could sue on my behalf and win every judgment. She also told me there would probably be no money for me. This would be throwing good money after bad. After a week my friend in California knew I was telling the truth.”

Was this the origination of the downfall of Gordon Grigg’s scheme?  I don’t know.  Many media reports share essentially the same story, so I have to believe that (short of being reputed) the call made by Mr. Wieland to the investment firms was the incident that represented the removal of the card from the house of cards that Grigg built.

Once pulled…the consequences began and continue to this day.  Is there more to this story?  Certainly, but for now…perhaps…readers can begin to understand how easy it is to be drawn into the illusion of a fraud and how simple it is to find that one day the card is pulled that begins the collapse.

More to come…but for now…YOUR COMMENTS ARE WELCOME…

Gordon Grigg – How a massive Ponzi scheme fraud was exposed – Part One

The article stated, “Thanks to taxpayer protector and crusader of bailout transparency, Inspector General Neil Barofsky — under the guide of the ever-noble Obama administration — Tennessee is in the headlines as the home to the first exposed bailout-related criminal case. Franklin’s very own Gordon Grigg was accused by the U.S. Attorney’s Office in Nashville on Wednesday for his creation of a $10.9 million fraudulent investment scheme.”  But that’s not the total truth…the real exposure of Gordon Grigg’s fraud started well before Neil Barofsky got involved.  Frankly, it started with a little known retired US Airways pilot named Steve Wieland.

I can’t forget the call I received from Steve.  I didn’t know what to make of it at first, but quickly I began to realize that he was spewing a tale of an ongoing fraud that in many ways he uncovered.  Carefully I listened to his story and understood that not only had he been defrauded, but he became unknowingly entwined in the web of deceit having expanded the trust network that Gordon Grigg so carefully played upon.

But this story is not so much about Gordon Grigg’s fraud – that is clearly known.  Rather, this is about how the fraud was exposed and, likewise, how Grigg lured his victims into the web of deceit.  For this series of blogs I asked Steve Wieland to share with me answers to many questions I asked.  Here I will, with Steve’s help, show how easy it is to become a victim of a talented fraudster.  Let the interview begin…

HOW DID I GET SUCKED IN?

I had met Gordon Grigg in the summer of 2005. He fathered my girlfriend’s child. This child was a product of an extramarital affair between the two of them. He had moved away from our town with his family. I had just started to connect with his son where I live. He was divorced and had a new, young fiancée. He was extremely charismatic, funny and generous.

For the next two years he came to visit on multiple occasions. But in that second summer, after I met him, I became sick. I was a professional pilot and my illness caused me to lose my medical license to fly airplanes. I had broken my back and had extreme pain due to nerve damage in my feet. I was on 17 medications a day and under psychiatric care due to depression. Additionally my girlfriend and I had broken up, although we remained friends.

My finances were not going well, my airline had already taken my pension, and I was 57 years old with mandatory retirement at age 60. One day my ex-girlfriend told me I should seek financial advice from the father of her child, and now my friend, Gordon Grigg.

Interesting that many, if not most, fraudsters find victims that are susceptible or vulnerable to a scam based on their expanded need.  Steve exposed his need based on the varied circumstances he found himself in at the time.  And Gordon, being the astute fraudster saw a weak individual that became easy prey to advance his Ponzi scheme.  But back to the story…

Gordon Grigg’s website was exemplary.  He touted advising everyone from racecar drivers to foreign rock stars to country music singers and professional athletes.

Since we had been friends for over two years and my girlfriend, the mother of his child, had recommended him, I felt comfortable in having an interview with Gordon to take over my finances.

As a side note, it is quite common that a fraud is expanded to new victims based on a close relationship of trust.  Note:  Gordon first got close to create the bond of trust, so that when it was time to lure Steve in – closing the sale was easy!

This would be the first time we’d ever talked about money. He came into my home, opened his briefcase, and after four hours we had never talked about finances. Instead he talked to me about religion. He asked me how long I’d been angry at God. He told me about his own depression and how he had to commit himself for 30 days to a psychiatric ward to become normal again.

He held my hand and prayed with me. At the time, he seemed like a godsend. I mean what more could I want? Here was a man who had been a college football star, handsome charismatic, extremely versed on investing and was willing to take on my financial package. When he left my home I asked him about the finances. He just smiled and told me not to worry about it and to get myself better. He said that was the most important thing. He said he would take care of me. And believe you me, take care of me he did!

The mark of any good sales person is to first find out what motivates you and then meet those needs.  NOW CAREFUL…not all salespeople are bad or use their talents for unscrupulous means.  But, Gordon was, well lets call him, an unconscious competent.  Perhaps, at some point he became a conscious competent…in other words he was an expert at what he was doing – all be it, what he was doing was WRONG!

Two months went by and Gordon had taken  away all of my control of my finances by having me sign a limited power of attorney up to and including my will where he made himself the executor. My health was starting to come back, but nowhere like it should have been. He invested me in legitimate TD Ameritrade accounts and then sold and bought in these accounts without  my knowledge until I received the monthly statements. He would visit periodically and I would take HIM to dinner. He would tell me that in 12 months I would kiss the ground he walked on. And then he told me of some special investments that only he could make because he pooled other investor’s money. These investments would be for millions of dollars and  I alone could not make these investments without being in his pool.

I often refer to victims of Ponzi schemes as having fallen into the PIT – PROMISE, TRUST and ILLUSION.  Based on what Steve shared above, Gordon got in based on trust, created the illusion (so Steve would continue to believe) and then made promises that enticed the victim – giving the illusion that they were special – that what they would receive was unique and only offered to a select few.  Actually, in that last part they were telling the truth – only a few select people would become victims!

As it turned out, I have a friend in California who is much like myself  being medically retired from the airlines. We talk all the time and visit occasionally. After investing with Grigg, he asked me what I was doing with my dwindling investments. I told him about Grigg and what a fantastic job he was doing for me and suggested he call him. After talking with him on the phone, Grigg suggested that he fly to California and meet with my friend.

Many of the fraudsters find that they grow their fraud based on the referral of those who are fully sucked into the scam.

At the time Grigg had advertised that he had offices all over the United States. But neither one of us did due diligence to investigate any further than what Grigg had published or had promised.

Interesting, but as I interview victims of frauds one of the most common comments is, “we were so caught up in the belief that our financial needs could be met that we forgot or ignored doing due diligence.”

After two or three meetings my friend decided that  he was going to invest with Grigg as well. Grigg did the same thing to him. He took over all his finances, reinvested them, and then put hard cash in bogus investments.

We were both very happy to see our investments growing while the rest economy was falling dramatically. What we didn’t understand was that the investments were only growing because Grigg typed the statements up on his laptop and generated them to us via his website.

I told yet another pilot friend, who was and is still active, and suggested he talk to Grigg as well. Grigg made a couple of trips to Phoenix where he met with my friend, driving a lavish rental car, dressed to the nines. This friend, however was skeptical, and did some research. He found out that Grigg had a $560,000 judgment against him by the state of North Dakota. When my friend called to inform me of this I immediately called Grigg. He assured me that it was a bogus complaint made by a widow, who did not know her husband’s investments and that no one could be in the business for 20 years or more and not have a complaint. I relayed this to my friend, and although he was still skeptical, chose to invest $20,000. That is less than 10% that myself or my friend in California invested.

For PART ONE…this sets the stage.  The fraud that Gordon Grigg had taken from North Dakota to Tennessee was soon to be completely exposed.  But, for now in the time we have this is quite enough.

Let me thank Steve Wieland for his courage to step out and expose (through his experience) how a fraud is perpetrated and how easy it is to be sucked into the PIT.  I regret Steve’s loss, but know that others will, perhaps, avoid the same disaster Steve and others faced at Grigg’s hand.

I have been alerted that Steve Wieland’s perceptions of the facts (from his perspective) stated above are inaccurate and untrue.  My objective is to uncover and/or discover what motivated folks to “invest” with Gordon Grigg, to review how a Ponzi scheme takes place in reality and identify how it unraveled or was exposed.  As such,  according to the SEC:

Grigg and ProTrust defrauded at least 27 clients out of approximately $6.5 million by obtaining such funds from them and claiming to have invested them in securities that do not exist. Specifically, the Complaint alleges that the defendants have: (1) obtained control over client funds and falsely claimed to have invested such funds in fictitious securities that were described as “Private Placements;” (2) created false and fraudulent account statements reflecting the clients’ ownership of non-existent securities; (3) falsely claimed that the defendants had the ability to invest client funds in government-guaranteed commercial paper and bank debt as part of the U.S. government’s Troubled Asset Relief Program (“TARP”), and that they did invest client funds in the TARP program; and (4) falsely claimed to have partnerships and other business relationships with several of the nation’s top investment firms.

I welcome any of the 27 client “investor” victims to contact me in an effort to seek the truth about how you became involved with Grigg and ProTrust.  There are many victims in a circumstance like this, and if there is a way to expose how what happened – happened, perhaps in the future others will have the benefit of learning from others mistakes.  Likewise, if there is anything stated above that is inaccurate, please contact me with details so that corrections can be made.

STAY TUNED FOR PART TWO!

YOUR COMMENTS WELCOME!

Special Strategy Session by Dan Frishberg – Wonder if it includes how themoneyman plans to make scammed investors whole?

When former investors share comments about their losses and how their trust in Dan Frishberg and group has been destroyed…it causes many to wonder who would pay attention to his investment strategy.  After all, from almost every angle it appears that Dan used BizRadio for his own gain and (pardon the way I put this, but) the hell with the investors.

So…here’s the latest in his self promotion efforts by Dan ( themoneyman ) as his new brand unfolds.  I was told by more than one source that Dan used BizRadio to build his RIA which spun off substantial sums to he and his family.  Let me suggest that it did not produce money for BizRadio or it’s investors.  The more that comes to light the more it becomes clear that BizRadio was a promotional arm for Dan personally.

But for now…the charade continues with the newest announcement.

Strategy Session featuring Daniel Frishberg
April 8, 2010
7:00 p.m. to 9:00 p.m.
Space is Limited. Reserve Your Seat Immediately!!!
To RSVP Contact Sonia Joao 713-490-8728 or click here

Dear Chuck,

We had such a tremendous response to our April 1st Strategy Session, that we had to stop accepting RSVP’s. But rather than turn people away, we are going to have a follow up Strategy Session on April 8, 2010.

Last month, I spoke at an amazing meeting in New York. I had planned to talk about some of the conventional investment strategies we’re using this year as the stock market begins another leg up in the bull market, but though we were forecasting it then, it’s happening right now.

The thing is, I received a lot of questions from the audience, and they led the whole speech in a totally different direction from the one I had planned.

Now I know what is concerning people, and I think they’re quite right. They worry that the bonds and the money markets and the CDs they own are all actually bets on the U.S. dollar. What’s more, they don’t feel that comfortable about the direction the dollar is likely to go next year and beyond. Frankly, I don’t blame them at all.

Other countries are making better decisions. The Asians have formed a free trade zone and are building a new railroad to tie together China with Thailand, Singapore and Viet Nam. Maylasia is booming. The bottom line is: these countries are making themselves financially stronger, while we in the U.S. seem intent on doing everything we can to push investment and business away – possible trade wars with Brazil and China, trillions in borrowing from other countries. You know the litany. Look, I can handle any kind of smart or foolish behavior by our government, but I’m very concerned that many people are going to be trapped.

Imagine this: The U.S. dollar falls off the proverbial cliff, and you and everyone you know have almost all your assets denominated in dollars. You thought you were safe, and your bonds, municipal bonds and even CD’s are still intact, but they only buy you half what they did a year before.

From an economic standpoint, our economy and your investment world are undergoing changes more profound than anything in the past five hundred years. You can see a lot of things changing before your eyes!

This is a new world. Everything is easier, and everything is more challenging.
Smart diversification can keep you whole, while dumb diversification will cost many investors their retirement.

How can I help you prosper in this world-wide economic revolution? Join me, Thursday, April 8, from 7:00 p.m. to 9:00 p.m. in Houston, TX. It’s free to attend, but if you want a seat, you must RSVP. Click Here.

Strategy Session featuring Daniel Frishberg
April 8, 2010
7:00 p.m. to 9:00 p.m.
Space is Limited. Reserve Your Seat Immediately!!!
To RSVP Contact Sonia Joao 713-490-8728 or click here

QUESTIONS:

1. Does anyone that reads this plan on attending the April 1st Strategy Session?
2. How can he have a tremendous response to his April 1st Strategy Session when April 1st isn’t here yet.  Wow…doesn’t this strike a nerve on what kind of lie can be told?  Perhaps I misread.  I got a response that said the following: “don’t you think he’s just claiming (whether true or not is another story) that there was a tremendous response, as in more RSVPs than they could accomodate? That’s how I read it.”  Fair…perhaps I misread the comment.  I guess for those who attend the proof will be in the attendance at the event tomorrow on April 1st.  If someone does attend, please make a comment about the meeting.
   
3. Did any investor, that, thus far lost substantial sums of money, plan on attending to raise the question regarding how Dan intends to make whole the investors that have funded his lifestyle?
4. Wonder who paid for that Amazing meeting in NEW YORK?  Perhaps it was left over funds from the scam on Rehan Siddiqi?  Na…I suspect those funds were long gone…but that’s just a guess.
5. Now I know what is concerning people, and I think they’re quite right. Dan…are you kidding me or anyone else that reads this…?  What is concerning most people who are paying attention to you is “how are you going to pay defrauded investors back?”  That is the question!  Beyond that all you have to share is empty self-promoting words.
6. Smart diversification can keep you whole, while dumb diversification will cost many investors their retirement. The words that Dan writes are profound and they all point back to him.  He’s right smart diversification can keep you whole.  But Dan…how can you spout off about diversification when you knowingly allowed funds with people’s money to NOT BE diversified?  What am I missing here?

Is it possible that I am the only person that finds this quite amazing?  Feel free to share your thoughts…cause I’d sure like to know what I’m missing.

Elisea Frishberg – Was she the Diva of Distruction for BizRadio or just along for the glamorous ride?

When you find yourself reporting on a fraud (yes that is what I now believe it was and/or is) like BizRadio and the related investment scams, you begin to wonder who the players are and what roles they play.  Most of the time the magnifying glass is placed on the men – who step forth front and center – and little is addressed related to the wives.  From my experience that is misguided.

The other day, as a digression, I was asked just how I seemed to know so much about how this fraud seems to have taken place.  The comment was made that I seemed to have an inside track on the actions and, more importantly, how and why the actions took place.  “How do you know so much,” the caller asked?

Let me be clear – it is with shame and regret that I say these next words – “I know because 25 years ago I was at the heart of a fraud that ultimately sent me to federal prison.  I know because I’ve been there.”

With that said, I also know from my experience and the experience I’ve witnessed from others, the power that a relationship can have over the choices that we make.  So with that said, let’s look at Elisea’s role and see if we can further piece together whether she was part of the reason the scam perpetuated.  (As a side note, for those who might take issue with me calling what I’ve seen a scam, I would just suggest that you talk to the investors who feel betrayed and have lost substantial sums of money.  I think they would agree with my characterization of what took place as a scam and/or a fraud.)

Not to be funny, but let me share a bit of a personal story (there is a point).  When I met my first wife (we were in high school) she didn’t have an interest in me.  So, being a bit of a salesman, I soon figured out that if I bought her things that she, otherwise, couldn’t have I could get her attention.  Buy I did.  One might say, looking back, I bought her love.  Ten years later I was still, in my mind, needful of buying her affection and would give her whatever she desired.  That emotional need was so strong, that I looked beyond what I knew to be true and honest and embezzled money.  My fault – I accept full responsibility.  But let me say, without the pressure to perform I suspect life would have been different.  Wonder if Dan feels that way or will should he face time in federal prison?

STORY ONE:  In an interview I recently conducted the following was shared.  It struck me that if there were some element of truth…then Dan Frishberg started out a bit like myself – buying his way into the relationship.

And the story goes as follows – She comes from the Philippines.  She was born in a little house with a dirt floor.  She brought herself up by the bootstraps and the story goes that she met Dan while Dan was working at a stock exchange in New York.  He met her one night when he (Dan) came back (from one of his trips abroad) and she wasn’t real interested in him.  She said something about a fur coat (she’ll tell this story to anyone who will listen).  “Buy me a fur coat and I’ll go out with you” (reportedly said from Elisea to Dan).   And, Dan said, “Just a minute I’ve got to go get something.”  And he came back and handed her a fur coat.

Every thing is about how she went from a little two bedroom apartment into this massive house.  It’s all about what I did – how I got – what I’m driving – it’s all about material things that she acquired…not about what we have built for our investors.

As I heard those words I was taken back to my past and reminded how easy it is to become so taken by material possessions and the position and power they bring, that the move from ethics to lack thereof becomes easy.  The three components of fraud are:  NEED, OPPORTUNITY and RATIONALIZATION.  I’ve mentioned them before, but as you see the story unfold it becomes clear how meeting NEED can drive RATIONALIZATION.  Those two components are a bit addictive and can create a pattern hard to break.

Mine was broken -first by admitting that I was a liar and a thief (which took more fortitude that I could have every imagined I had) and second REINFORCED by an active prison sentence.  Just as a side note – Prison sucked!  But it was likely the best thing that could have ever happened to me as it gave me focused time to learn what it meant to achieve true success…something, unfortunately, I feel that Dan has missed thus far in life.  But back to Elisea…

THE STORY CONTINUES…   When a Ponzi scheme takes place typically you’ll find extravagances in lifestyle and assets (or what appear to be assets).  Rarely do you find someone engaged in a fraud that doesn’t in some form or fashion project their fraud through their lifestyle flash.  (Don’t assume that everyone living an extravagant lifestyle is a fraud.  That is not true.  But, many who are frauds certainly allow their lifestyle to reflect their abuse of money – other peoples money.)

In many cases while the wife (Elisea in this case) may not have perpetrated the scam…she perhaps is someone who could spend Dan Frishberg out of business?

They live in a house that costs $10,000 per month.  (By the way I’ve heard from $7,000 to $12,000 per month)  It’s a rental located in a country club section of town.  That a pretty ambitious house to live in.  They flew first class to Dubai.  He took $275,000 out of BizRadio and Elisea was getting $85,000 – and that for a show that was on for two hours per day.  That’s a lot for a station that was losing money.  It wasn’t publically funded.

Right when all the Ron Crider stuff was coming to a head, she ordered pizza for the employees. The assistant who was told to order the food was going to call Pizza Hut, because they had a deal for three large pizzas for around $30. Well, Elisea refused, and said that they needed to order from some upscale restaurant. They ended up paying over $100 for one pizza, salad, and garlic bread. Keep in mind, this is right around the time when they’re laying people off left and right and not paying everyone else on time.  They blow through money like it’s going out of style.

Hum…money, extravagance and motive…  One question (among many) is what role did Elisea play in the overall downfall of BizRadio and the scam/fraud perpetrated on the unsuspecting investors?  Let me be clear – living an extravagant lifestyle – while despised by some – is, in and of itself, not a crime and should not cause someone to be painted with a criminal brush.  Although it’s funny, I’ve been told that Elisea has questioned many wondering who is providing information about Dan and BizRadio?  In fact, it was reported that I was labeled the “criminal.”  So…if you haven’t gotten this yet…I was exactly what she labeled me.  The thing I’ve found is – one is not defined by their past, but rather by the choices they make today.  Sad, but it would be better if both Dan and Elisea would make more empowering choices and focus on how to return the investors money instead of spending money on pizza’s that further put salt in an already festering wound.

BUT WHAT ABOUT THE DREAM IN A BOX?  Is it possible that BizRadio became Daniel and Elisea Frishberg’s own personal play station (I’m not referring to the Sony Playstation here – but then most of you get this)?

From: Elisea

Sent: Thursday, August 06, 2009 7:05 AM

Subject:  daniel wants to bring back american dream in the box, for 7-8pm

Doug and all-

This will be live and I know it will not last long – we go out of air sometime end of October.. we will supplement the show with 2 minutes commercials airing all over the station so we have congruence while we are not on air.. down the road..

Daniel wants to bring back the show American dream in the box.  With an idea I will be part making some money.  Making me a brand name bizadio personality able to Sell ideas on air- life style ideas, American dreams- nice merchandising- bizradio brand.. from exercise books-shoes.  Clothes, shirts,= perfumes- ties- bizradiomall/bookstores.  It will take awhile so we need to start now.

Please put me back on the hosts schedule- on flyers and what ever programming materials we need.

My regular guest will be several people- dani babb she has a lot of material selling stuff on line- I will need to make a deal with her to be part of bizradio so we can participate on all the sales of her on line products, one guest also will be dr. Arthur laffer’s wife- she can also sell some life style items.. and also teeka tiwari he can sell some newsletters and other intellectual stuff.

Doug , please let me know how soon can I start..   There is already intro made by Sal Monistere, I should be ready to go…just clear stuff for me.

I will start gathering deals with several stores.. newyork merchandising deals..  Kenny- this will also be good to discuss with la tesha , she can be my guest also selling her products since she has a lot of  on line stuff- we can incorporate her stuff now in our website.. do not forget to mention that to her.. she has a lot of affiliates relationship.. part of wanting to be American is to enjoy the lifestyle the Americans are enjoying..

It will also include travel, since I travel a lot.  we will put that too, I will incorporate also it in a tv show about travel of the rich and the famous… on tv..  and radio combine..i will include chinia- china and india- Europe and brazil area.. etc. how our people and their locals can connect.. several hotel ideas.. and hotel connections and deals we can participate.

Thanks Sal. Elisea

Since we are also radiowallstreet, I will have several guest that

Elisea Frishberg

Vice President

BizRadionetwork

3050 Post Oak Blvd # 1680

Houston, Texas 77056

I try to be fair.  Even with what I have shown above, I cannot say without doubt that Elisea was a co-conspirator in the investment fraud that I believe occurred, but I do believe that her fingers were in the pie perhaps up to her elbows in the flop called BizRadio.  The following was shared with me and I can’t say that I disagree…but read for yourself and you be the judge.

In short, Elisea really believed that her (horrible, horrible…it’s not even a debate) show would bring in money for BizRadio. She envisioned “exercise books and shoes, shirts, perfumes, ties,” etc. etc. This is a show that aired last summer from 7-8pm (after her husband’s and Scott Bleier’s shows) and literally had so few listeners that the production of it was a complete waste of time. They had a guy producing a live video stream of this show (for the now-defunct BizTv) that, in the month it aired, had a combined viewership of zero (believe me, there were statistics from the website…every day: “how many?” every day, “zero.” In the end…NONE). What an asinine waste of time and money. This was just a small indicator of how delusional Elisea Frishberg is, and how she is most likely the reason why Dan lives in such a mind-boggling alternate reality.

Every choice has a consequence.  I know as I’ve lived the consequences of my choices.  The question is – what will be the consequence to Dan Frishberg and perhaps Elisea regarding the choices they have made?  Many investors are angry and want what is just and fair.  The larger question that looms is what does the government want (if anything)?  I gotta admit, the more I look at this it appears that investor monies went into a black hole called BizRadio that was nothing more than Dan and Elisea’s personal playground that was used for personal business promotion.  Was it ever a real business?

More to come…meanwhile I would love your comments on whether you feel that a spouse should be actively considered in any criminal accountability for choices based on enjoying the fruits of a financial scam or fraud?

YOUR COMMENTS ARE WELCOME.

For more links to Elisea Frishberg see here, here and here.

Al Kaleta – “I took a bullet for Daniel” – The Daniel Frishberg saga continues…

“I took a bullet for Daniel!”

I can’t begin to tell you how many times I’ve had that phrase stated to me by folks I elect not to mention by name.  But, the one that, beyond the phrase, was consistent – I came from Al Kaleta’s mouth.  Did I personally hear it?  NO!  But, either a lot of folks are lying or Al felt that his agreement with the SEC was the equivalent of “taking a bullet” for Daniel Frishberg.

But why?  Why would you, if you were not guilty of some wrong doing, lose your license and be banned from investment activity?  What motivated Al Kaleta to take that ‘bullet’?

So I began to look a bit more deeply…and my gosh…well I’m amazed.  Starring any of us right in the face was what I’ve come to observe is the scammers scam.  Now let me be clear…I’m providing this link for two reasons: (1) it is the example of how easy it is for a scammer to scam; and (2) it’s amazing how easy it is for those who would perpetrate a crime to get legitimacy from the media.  Check out this youtube video (but remember to come back here for comments…) – video of Al Kaleta.

AL’S WORDS: “Well, the thing that’s happening right now is that we had such wonderful time in the market, and there were such high returns that if you hear today of such extraordinary returns, good deals, things that are going to make you instantly profitable in your investments – they are probably a scam!”

WHAT DID I JUST HEAR? “They are probably a scam.”  Al – now if that is the pot calling the kettle black!  December 9, 2008 Al Kaleta is talking about himself and the scam he was actively running under the guise of helping others avoid scams.  AMAZING!  But, not that surprising as I’ve seen that over and over – just ask Gordon Grigg – of course to do so you’ll have to write him in prison.  Back to Al’s interview…

AL’S WORDS CONTINUED: “Your best bet is to call Fox News.  Call to the hotline and ask for advice.  Is this a scam?  Could this be a scam?  And they will direct you to the right professional to give you advice.”

QUESTION: Since Al Kaleta was busted in late 2009 – less than one year since he made his TV appearance, I wonder if people in mid 2009 took Al’s advice and called the Fox News Hotline?  I wonder if Fox News ran a story on Al’s troubles with the SEC and warned their listeners that Al, Dan Frishberg and BizRadio might need to be avoided?  Honestly I would appreciate it if someone could answer those questions.  Again, back to the interview…

HERE’S MORE OF AL: Question asked by the Fox News representative…”What returns would be considered ‘too good to be true?’”  AL: “Anything above 11 – 12% is extraordinary.  You can reasonably get in bonds 10% – you can find investments at 8 or 9%, but when you start hitting returns of 15, 18, 20, 25% and it sounds so unrealistic to you or that it’s so quick…  Nothing is quick – shy away from it.”

AS I RECALL… Al’s investment scam went something like this – investor – you get 10% – Al gets 12% and his profit is the 2% spread.  Seems to me he just used Fox News and his interview to set the standard so that his scam didn’t seem like one.  Sad, but that’s part of the scam artists illusion.

BUT THERE’S MORE: “You know the other thing you have to be careful of are these Ponzi schemes where they come in and – pyramid schemes – where they gather 15 or 20 people and everybody – they put in $100 and build a pyramid … typically these are not something you should get involved with in this marketplace.”

EXCUSE ME - But thanks Al for sharing with the listening/viewing audience not to invest with scam artists like you.   Oops…it wasn’t disclosed then what you were doing to those who invested and trusted you.  I have to wonder what Al was thinking when he so clearly was talking about his role in a massive investment scam that included Dan Frisberg and BizRadio?

FINAL THOUGHTS: I shudder as I write this blog – because I have been told on more than one occasion that Al Kaleta is a man to be feared!  So here’s the story – after hearing this multiple times lets just let the cat out of the bag.  Al is reported to have told several individuals that he should not be crossed.  Apparently claiming to a military hero, the story goes that some men under his command in Germany crossed him.  But Al is not a man to be crossed.  So, he (sorry but this is the story that I’ve been told by different folks), planted Heroin in their possessions and then reported them for inspection.  When the drugs were found they (the men that crossed him) were sent to prison.  Moral of the story – don’t mess with Al.

So I have some questions:

• Is Al truly a military hero?
• Was Al (as a military colonel) ever stationed in Germany
• Were there ever men under his command that were busted for drugs and sent to federal prison
• Or, is Al just a blow hard?
• Perhaps law enforcement should look into Al’s assertion to see if Al should either spend time in prison for his action – who knows?

If by the way I never write another blog…check to see if Al made a trip to the Carolina’s.  Come on Chuck…he’d just send some of his buddies to take care of business…  I should have thought that one through.

Regardless of the answers to the above…Al was telling the truth in his interview…little however did people know that Al was speaking from experience as a proficient scammer!

NEWS…JUST IN:  BizRadio announces a strategy session.  WHAT AM I MISSING HERE…?  Kaleta is busted by the SEC.  Investors are screaming over being deceived.  Frishberg has likely perjured himself with the Siddiqi mess.  And, yet they have the audacity to promote an investment STRATEGY SESSION.  Sometimes folks become so caught up in their own illusions that they can’t see reality.  I predict PRISON for both Kaleta and Frishberg.

YOUR COMMENTS WELCOME

Business Ethics – Three Ethical Questions – What would you do? Comments by Business Ethics Speaker Chuck Gallagher

Just this past week, I had the opportunity to speak to an international construction company that ranked 14% points higher than it’s peers when it comes to “business ethics”.   In this day and age, that is quite an accomplishment.   With increased pressure to perform, the temptation to cut corners and justify unethical behavior has never been greater – not at least in the past several decades.

As I approached the end of the presentation, when the floor was open for questions, one brave gentleman asked an interesting question:

A company I was working with had bid on a construction project for a municipality.  The six members of the city council voted unanimously to award the firm I worked for the contract.  We were set to celebrate when I received a call from the city manager’s office asking me to visit.  When I arrived I was told that all that stood before me and the awarded contract was $50,000.  I was, in effect, asked to pay $50,000 bribery to gain the contract.  I declined!  Needless to say, the contract was awarded to another vendor.  THE QUESTION:  What would you advise us to do under those circumstances?

Prior to this question being asked I had finished talking about the three components that come together when ethical people make unethical decisions:  NEED, OPPORTUNITY and RATIONALIZATION.  As I heard the question, it dawned on me that his question was a real life example that was clearly on point.  Let’s review.  In order to grow the business you need to have contracts awarded – in this situation there was clearly NEED.  If the company didn’t have a need, they would not have bid.

They could have won the contract – they had the OPPORTUNITY.  All they had to do was agree to payment and the contact would have been awarded.  What a small price to pay for the current business and the opportunity for future business.

RATIONALIZATION – that was easy, we are pressured to perform and after all, everybody does it.

There you have – the three components were there.  The perfect storm existed and the outcome – NO THANKS.  But with that two more questions arose.

If I had been working for this company and made the same decision, would senior management have supported my decision?

That question, especially in a presentation setting, was easy to answer by the Chief Compliance Officer.  The answer was predictable and I believe honestly answered.  Yet, I could tell by the look in many of the participants eyes, that they could identify with the quandary posed by this scenario.  Does the need for business outweigh the practical application of ethics?  But beyond that question – the last question asked seemed more profound.

Knowing that what I was asked to do was wrong, unethical and potentially illegal, should I report the request for a bribe to law enforcement and risk getting ostracized from the construction community or should I keep my mouth shut and just accept that I lost the bid?

This was a powerful question – and a question that had many scratching their heads (so to speak).  Does one have an obligation to become a “snitch”?   I have to admit, the answer to that last question was not so easily black and white.  Let’s say you did report and as a consequence you found that governmental entities elected to ignore your future bids or refused to allow you to bid – was standing up for ethics worth the cost?  Or let’s say you didn’t report the illegal act request and just took your lumps – only later to find that an investigation was underway and you were implicated for conspiracy since you didn’t report the behavior.   What is the ethical answer?

One thing I clearly learned…ethical companies don’t shy away from the tough questions and are willing to spend the time and money to train their employees so that ethics and ethical choices become second nature.  Every choice has a consequence and the choices that follows good ethics are what keeps companies in business for generations.

Here’s a link to the SKANSKA ethics hotline – which serves as an excellent example for other companies to follow:  http://www.skanska.com/en/About-Skanska/Code-of-Conduct/This-is-how-Skanskas-Code-of-Conduct-Hotline-works/

This company is second to none when it comes to their commitment to ethics and ethical behavior.

YOUR COMMENTS OR ANSWERS TO THE QUESTIONS ARE WELCOME!

Club Fed huh? Bernie Madoff reported beaten in Prison

It’s not unusual to hear.  From time to time when I speak to groups – whether it’s financial services, oil and gas, or manufacturing I hear the back of the room comment (most of the time under their breath), “You were sent to ‘club fed’”.  I must admit I do have a twinge of resentment when I hear that remark.  It is “fed”, but it ain’t no “club.”

Unfortunately, Bernie Madoff is find that the hard way.   The Wall Street Journal reports (full report seen here), that Bernie Madoff was attacked while an inmate in prison.

Mr. Madoff was treated for a broken nose, fractured ribs and cuts to his head and face, according to a felon currently at Butner serving time on drug charges who was familiar with his condition at the time. The details of the injuries couldn’t be independently verified.

Another inmate who recently was released from Butner after serving time for drug charges and a third person who isn’t an inmate and is familiar with Mr. Madoff’s situation both confirmed the assault.

The former inmate said the dispute centered on money the assailant thought he was owed by Mr. Madoff.

Fellow prisoners say Mr. Madoff, who is Inmate No. 61727-054 at Butner, has garnered some respect from inmates because of the breadth of his Ponzi scheme. The fraud caused about $20 billion in net losses by thousands of investors.

Since Mr. Madoff’s arrest in December 2008, five other individuals have been charged in connection with the fraud. Two have pleaded guilty; the other three have either maintained their innocence or declined to comment. Prosecutors have said there were more alleged co-conspirators in the scheme who worked at the Madoff investment firm.

Separately, prosecutors from the U.S. attorney’s office in Manhattan are building tax-fraud cases against Mr. Madoff’s brother and two sons, all of whom worked at Mr. Madoff’s investment firm, people familiar with the matter have said. Those men have said they had no knowledge of fraud.

Every choice has a consequence!

YOUR COMMENTS ARE WELCOME

Prison Inmate Presentation – Looking into Eyes seeking Hope! Comments by business ethics and fraud prevention expert Chuck Gallagher

February 23, 2010.  As I walked up to the main area where visitors are received at the prison, it occurred to me that some 15 years ago I was in prison.  What a reality check!

Now, for the first time, I was returning – just this time it was in a different role.  Fifteen years ago, I was an inmate and almost to the day fifteen years ago, I was taking my first steps out of prison to speak to students at a local school about choices and consequences – about what choices I made that got me into prison.  On this day, some fifteen years later, I was speaking to inmates, having successfully navigated surviving and thriving following prison, about choices and consequences – specifically how to succeed in life following incarceration.

And, as I write this I have the sneaking suspicion that some of you – haven’t looked closely enough at my background and will find surprise in my open revelation.  To me this is nothing new.  I haven’t hidden my past.  If you are open about who you are then those who would attack you are denied the ammunition.  But, more important than my past is the fact that I am not defined by it either.  I cannot change the fact that I am a convicted felon, but that label does not define who I am and the value that I bring to my family and society.

But this blog is not about me…rather it’s about what I saw when I looked into the eyes of those prisoners on February 23rd.

WHAT’S NEXT?  I remember asking that question…time after time.  As I took those first 23 steps into federal prison I knew that my life had changed.  This new environment was something I was unfamiliar with – a foreign experience and for sure something I was unprepared for.  I couldn’t go to Barnes and Noble and read “Prison for Dummies.”  Although, I’ve thought of that since 9 out of 100 Americans will be incarcerated at some point in their lives.  (Sad statistic).

Prison is a different world.  The rules are unique and one must adapt to this new society or face problems that most would want to avoid.  It’s not like the movies, at least not in every way.  Likewise, especially minimum security prisons are not “club fed” either…just ask anyone who’s been there.  Life is different and the adaptable survive.

OVER TIME…you become accustom to your new world…the world in which you work each day for 12 cents an hour.  This world knows you as a number, not a person, and all effort is practically made to strip you of your identity.  Bernie Madoff is no more important than John Doe…in fact, celebrity might work against you.

I tried in every way to keep a portion of who I was, but 2 steps forward were met with a push of 5 steps back.  The sooner you accept your number and learn to blend the easier it becomes to survive.  And, if you are cursed with a long sentence, then prison becomes a way of life.  If I’ve ever seen anything that creates an entitlement mentality – prison does.   It’s a bit like being stuck in a boarding school for a long period of time, you eventually think that life is what you are currently experiencing and forget that another “civilized” world exists out there somewhere.

NEARING THE END – But then you begin to see that the end of your sentence is approaching and again you wonder “what next?”  Actually, for most inmates, that end “What’s next” question is the scariest one.  Think about it…for “X” number of months or years this has been your life.  You have not had to be concerned with where you would sleep, what you would eat, how you would get medical care, or where you would work.  All of those questions were conveniently  answered for you.  After all you were the ward of the federal government or state…under their care and direction.  Now, however, you’re facing a new day…a day when those questions have to be answered by YOU!

THE PRESENTATION: As I stood there, facing a group of inmates for the first time since I was released, I knew as I looked into their eyes what they needed.  They needed HOPE!  They needed the reassurance that they could make it on their own, that they were not destined to be a repeat statistic.

REALITY CHECK:

• Regardless of what they or anyone might say, the choices they made got them there.  The sooner we learn to accept that we are truly the masters of our fate – good or bad, the quicker we learn to apply those “master” skills to empower ourselves to achieve our dreams.
• Life in prison (while truly a different experience and one that must be adapted to) is not normal and we must not forget that we are responsible for our own well being.  No one is responsible for us – and for some that is a hard lesson.
• Yes…when you get out you will still be a convicted felon and many people will look down on your for that label.  The question is not what you have been but rather what you elect to be.  As a wise man once said to me, “Son, you’ve made a terrible mistate, but YOU ARE NOT A MISTAKE!  The choices you make today will define your life in the future and the legacy you leave for your two children. MAKE THOSE CHOICES WISELY!”
• But, Chuck, finding work will be hard.  Yea…that’s right, but they key is to do what other people are unwilling to do.  Have you ever wondered what makes folks born outside of this country so successful?  They see opportunity where others don’t.  So think about the most “unsexy” jobs that most folks don’t want to do and do them.  You can become rich in “garbage!”
• Last, but certainly not least, believe in yourself.  Every human being, regardless of circumstance, has the power to move in the direction of your dreams.  In fact, there is a song by that title sung by Michael Gott.  I would highly suggest that you look it up on itunes…but it for 99 cents and listen.  What an inspiration!

It was my honor to speak to those inmates and I hope that other opportunities like that present themselves.  While speaking to a paying audience is wonderful, my “pay it forward” is addressing inmates and as I look into their eyes seeking hope – I hope that I fill their hearts with the knowing that they, too, can find joy beyond prison walls.

The Talented Mr. Frishberg – How a dynamic dream turned into a devastating disaster!

No one starts of to be a fraudster.  Well I suppose there are a few bad seeds, but most people whose names are in the headlines – people who have been linked with financial failure and investor fraud, don’t start off their career thinking, “Wonder who I can scam today?”.  Al Kaleta didn’t start that way.  David Wallace didn’t start that way.  And, certainly, Daniel Frishberg didn’t intend, at least not at first, to defraud.

So what happened?

I wasn’t there.  So, there are those who will say that I am only speculating and that’s something I should not do.  Yet, daily I’m getting confirmations via email and phone saying that what has been written thus far is dead on point.  One person, humorously said, “Are you sure you haven’t lived here or worked in the past for BizRadio, cause you seem to have an uncanny insight.”  To be clear – NO and NO.  Perhaps the reason I’m on point is I’ve been there before.  I understand what’s happened cause I’ve lived it and know how it happens and, more importantly, what happens when the fraud or scam collapses.  It’s not pretty!

So let me speculate (and yes, speculate is the operative word).

Dan Frishberg – as a young man – worked in and around the financial services industry.  He learned about the market, traded and found (that as a smart man) he had the aptitude for financial services type work.  If Wikipedia is accurate, Frishberg worked for the financial services division at Prudential in San Antonio and later did radio advertising for the company; he appeared frequently on air. Radio station KTSA hired him to do a financial program. After the show gained popularity, Frishberg formed the BizRadio Network in Houston.

My guess is “radio” for Dan was a bit of a drug.  He had the skill and moxey to put him self out there and found out quickly that being on the air created a bit of celebrity.  His voice beamed out over the airwave and not long thereafter Dan tagged himself “The Money Man”.  Dan became the go to guy – the person who had an opinion and was glad to share it.  And, for anyone involved in talk radio, when others listened or, even better, sought your opinion – you are more than willing to talk.

Now, Houston is not an insignificant market.  So if you’re in a major market then it becomes a bit easier to gain attention and attention is what Dan got.  Interviewed on Fox and CNBC (seen here and here), and having published (his self published book) “Escape from the Herd,” Dan found that getting attention wasn’t all that hard.  By then, he had formed BizRadio and I believe had visions of grandeur – Frishberg could be the next “Jim Cramer.”

From Americandreaminabox.com – Daniel Frishberg has become one of the most sought after financial faces on national TV, appearing several times each week on CNBC, Fox, and the Canadian Business News Network. His commentary is also carried on a rapidly growing number of local TV stations all over the country, while his weekly series “Where Genius Meets Street Smarts” is by far the most downloaded financial podcast on the BizRadio Network.

How do I know this…well some of this is speculation – intuitive speculation – and the rest has been pieced together from interviews from investors who have been scammed.  But, from a personal perspective, I was approached by a BizRadio representative asking if I didn’t want to air a show on their station in Dallas.  Simply put – what they offered was PAY to PLAY.  I would pay dearly for time on their weak station just so I could be associated with BizRadio – the show that tapped into the business movers and shakers – the show that tapped into folks with money!

I TURNED THEM DOWN.  Their offering just made no practical business sense.  As best I could determine, Frishberg just wanted to broker time in order to fund his station and radio addiction.  He was creating the illusion that he was “the man” and needed money to perpetuate the business.

Well…on with my speculative story…  As 2008 drew to a close and 2009 began, Dan found that expanding his air time presence was growing increasing easy and that supported his brand – BizRadio.  The only problem was – BizRadio had never made money, in fact, it was a great money sucking machine that only benefited Dan’s dream.  There is zero doubt that Dan saw BizRadio as a brand that, once took hold, could be no different than “The Street” or any other major syndicated talk show program that becomes worth millions.  Gosh, if Dave Ramsey could do it, if Jim Cramer could do it, if Rush Limbaugh could do it – Dan Frishberg could do it.

But, in my opinion, here’s where the problem really surfaced.  Dan Frishberg seems to have a problem (as smart as he is) in distinguishing between illusion and reality.  Reality was – his radio station was a losing proposition and had been from the start.  Reality was, Dan – while touting investment advice – was not adept at the art of running a business, especially a radio station for profit.  Reality was, Dan should have branded himself and not attempted to sell the “dream” of the station.  But, Dan didn’t then get reality and, frankly, I’m not sure if he’s connected to reality yet today.  Dan was living an ILLUSION.  He created the illusion, the believed in the illusion.  In fact, the Illusion became his life, at least from all I’ve been told.

So what do you do when you have a losing business that requires substantial capital and the failure of your business means your personal failure?

When I talk about fraud, I often cite three factors in creating a fraud or scam: NEED, OPPORTUNITY and RATIONALIZATION.

So let’s look at Dan’s devastating disaster and see how the pieces fit.  ONE – Dan needed money.  He was poor at selling advertising (and probably if the truth were known didn’t like the day to day operation of a radio station) and as time moved on and his ego in broadcasting grew, he began to believe his own bulls__t.  He became a pain to deal with as he was caught up in his own self-importance.  NEED that one is easy!

OPPORTUNITY – Dan had one major asset to help him solve his money problem – he had branded himself as “The Money Man.”  So, on the radio daily, featured from time to time on FOX and CNBC, Dan was able to grow an effective illusion so he could attract investors.  The real question to me is who scammed whom?  Dan needed fund and others like Al Kaleta and David Wallace did too.  They came to the table with an investor base believing that Dan could help them expand their base and hence their access to cash.  On the other hand, Dan knew that they had access to cash and he needed that badly.  Dan sold them on the BizRadio dream.  I can hear it now…I have a dream that one day I’ll be as big as Jim Cramer (just not as wild) and BizRadio will be sold to a major player and we’ll all walk away with more wealth than we can imagine!  Dan needed them – they needed Dan – oh is this a marriage made in heaven or what?

RATIONALIZATION – So…investors invest with Kaleta, David Wallace, and others well known names under one pretense only now to find that their money was invested (or some say stolen) by BizRadio to support the extremely capital intensive and draining operation.  But didn’t Dan know what he was doing?  Now, that’s a great question.  My answer – NO!  Dan was so caught up in his ILLUSION that he became incapable of distinguishing illusion from reality.  And, that’s the way it goes…till…

The SEC stepped in and Kaleta was busted.  While I can’t confirm an SEC investigation (I don’t know that for a fact), I do know that if there isn’t one they are sure missing a golden opportunity to stop this madness.  The card has been pulled from this house of cards, the only thing left is to watch them collapse.

Dan Frishberg is a smart man, talented, articulate.  But, Dan’s dynamic dream is becoming a devastating disaster…and we are witnessing it’s collapse now.  It’s sad for the defrauded investors and it’s sad for Dan.  But, every choice has a consequence and I believe that Dan’s consequences will be far greater than he could ever imagine.  When a massive ILLUSION collapses the REALITY that follows can be profound!  As much as I find displeasure in my next words – I predict that Dan Frishberg will have time to evaluate REALITY in PRISON and he may not be alone.

YOUR COMMENTS ARE WELCOME!